Case Study in Competitive Open Markets The World Oil Market.

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Presentation transcript:

Case Study in Competitive Open Markets The World Oil Market

Crude Oil Prices $/barrel Nominal $ Inflation-adjusted 2011 US$ 2011

Supply: Crude Oil Production 000s barrels/day

$/barrel (000s of barrels/day) 56,000 64, Supply 1979 Demand 1979 Change in World Oil Price Supply 1980

SUPPLY: Crude Oil Production, OPEC Countries 31,000 23,000

SUPPLY: Crude Oil Production, Non OPEC Countries

Estimating Demand Elasticity for Oil Year Price $/barrel $20 $30 Quantity Barrels/day (millions) 64 56

Recent Drastic Movements in World Oil Prices

Historical world oil prices and production Recent world oil prices: Cartoons: Reprinted by paid license permission from CagleCartoons Cartoonist: Tab, The Calgary Sun, 2/14/2005 Cartoonist: John Cole, The Scranton Times-Tribune, 12/19/2014 Reprinted with license permission from CagleCartoons References